Some couples don’t need a financial adviser. That’s because one of the partners has the desire, time and expertise to do the work that other couples (and individuals) outsource to professionals.
Yet in my 25 years of experience as a financial adviser, it’s been rare that I’ve encountered a scenario where both partners each could handle the family’s finances without the assistance of a professional.
In most mature marriages today (people over the age of 50), regardless of which spouse pays the bills, it is still usually the husband who makes the investment decisions.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Yet the reality is that, in most marriages, the husband will die before the wife.
So what happens to the widow (or the husband) who is left to deal with the financial matters? If she was the one who handled the affairs, or at least took part in the process, she’ll probably do just fine. But if she relied upon her husband to manage the investments, she’ll probably have to find a financial adviser to assist her – precisely at a time in life when everything seems uncertain.
I’ve noticed during my career that, for those couples who both have a relationship with the family financial adviser, the surviving spouse handles this incredibly difficult transition with much less stress than those people who have no relationship with an adviser. That’s because they don’t have to worry as much about their finances because they know they have someone who has their interests at heart.
If you are married and you manage your family’s finances, ask yourself the following question: “How would my spouse go about managing our investments if I were to die”?
If you have a high degree of confidence that your spouse could continue managing things on her (or his) own, that’s excellent! But, if not, you really ought to take some steps to prepare for the inevitable.
There are two things you should do: First, try to involve your spouse with the process. Talk with her (or him) about the decisions you are making and seek her (or his) involvement in selecting the investments.
If you find your spouse is receptive and truly interested in learning how to take care of the family’s portfolio, without the help of an adviser, great. But if not, consider what many others in your situation have done – develop a relationship with a financial adviser as soon as possible.We’ve had many people come to us over the years who became clients of the firm for the sole purpose of taking care of their spouse. They realize that if they can introduce their spouse to an adviser beforehand, and spend the time with the adviser so that their spouse knows and trusts that person, it will be one less thing their spouse will need to deal with when they pass away.
The benefit to the spouse is that she (or he) has someone to lean on during the immediate aftermath, as well as the years ahead.So if you are a person who takes pride in doing a fine job managing the investments, stop and think what it might be like for your spouse if you were gone. You might consider it worthwhile to find an adviser your spouse can trust well before you are gone so that she (or he) can feel confident about their finances in the event of your demise.
Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit MoneyMatters.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.
-
13 Answers to Pressing Social Security QuestionsFrom smart claiming strategies for couples to tips on maximizing your monthly check, we have advice that can help you.
-
Keep Tax Collectors at Bay with Muni Bond FundsMunicipal bonds can be good insurance against inflation — and interest is tax-free. But as with all investments, understanding risk is key.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the FairwayThink of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty MovesIf you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
